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Four Hawaii
hospitals agree
to merge

The union of both Kapiolani
facilities, Straub and Kauai's
Wilcox would create the state's
largest health system

---

By Tim Ruel
Star-Bulletin

Four Hawaii hospitals have agreed to a merger that could establish the state's newest and largest health system within six months.

Kapiolani Health, Straub Clinic & Hospital and Kauai's Wilcox Health Systems plan to combine operations under a new parent company, to be called Hawaii Pacific Health. The boards at Straub and Kapiolani formally approvedthe merger this week, and Wilcox's board had already given its thumbs-up earlier, officials said today.

Together, the organizations represent a total of four hospitals -- the Kapiolani Medical Center for Women & Children on Punahou Street, the Kapiolani Medical Center at Pali Momi in Aiea, Wilcox Memorial Hospital in Lihue, and Straub's main hospital on King Street.

The four medical centers represent a total of about 750 licensed hospital beds, well beyond the 550 beds at the Queen's Medical Center, Hawaii's biggest hospital.

The individual hospitals would retain the same name, locations and boards of directors, except for Straub, which is a for-profit company and would have to convert to nonprofit, according to Straub spokewoman Ann Nishida.

Also, Straub doctors could no longer be shareholders in the company or control the board of directors, although some could be on the board, Nishida said.

The parent organization Hawaii Pacific Health would have a board composed of members from each hospital as well as the community, Nishida said.

The merger is the result of increasing pressures placed on hospitals nationwide, following the federal Balanced Budget Act of 1997, which has stripped millions of dollars in hospital revenues by slashing reimbursements for Medicare and Medicaid.

"It makes it extremely challenging," said Pat Oda, spokeswoman for Kapiolani Health. Budgets for all of Hawaii's hospitals have been waning, she said.

The merger could help the three partners streamline operations and organizations, as well as share budgeting for physical improvements, said Wilcox spokeswoman Lani Yukimura.

The merger process will take at least another six months, however, because of necessary regulatory measures required by the state, including final approval by Marilyn Matsunaga, administrator for the state Health Planning & Development Agency. The merger must meet several criteria and could face public hearings, Matsunaga said.

"There's so much to come and yet to do," said Oda.

The hospitals must discuss potential ways to swap services, such as pediatrics, which is a speciality of Kapiolani. "Some of our staff had concerns: Will ours (pediatrics) be phased out?" said Straub spokeswoman Nishida.

Nancy McGuckin, executive director of the union representing Hawaii's nurses, said the hospitals have told her that the merger should not affect existing union contracts. She doesn't expect layoffs either, though she notes the hospitals have been discussing how to streamline administrative personnel.

Hospital spokespeople acknowledge the possibility of streamlining, but say it's too early to comment on specific changes.

McGuckin said the Hawaii Nurses' Association's main concern is the impact of the merger on Wilcox, which has been a critical part of Kauai's community since it was founded by the Wilcox family in 1938.

Wilcox spokeswoman Yukimura said the merger should have no negative impact on the hospital's community-based culture.

Kapiolani Health was founded in 1890, while Straub originally formed in 1921. Both have about 2,000 employees, while Wilcox has 565.

The union of both Kapiolani facilities, Straub and Kauai's Wilcox would create the state's largest health system

---

By Tim Ruel

Star-Bulletin

Four Hawaii hospitals have agreed to a merger that could establish the state's newest and largest health system within six months.

Kapiolani Health, Straub Clinic & Hospital and Kauai's Wilcox Health Systems plan to combine operations under a new parent company, to be called Hawaii Pacific Health. The boards at Straub and Kapiolani formally approvedthe merger this week, and Wilcox's board had already given its thumbs-up earlier, officials said today.

Together, the organizations represent a total of four hospitals -- the Kapiolani Medical Center for Women & Children on Punahou Street, the Kapiolani Medical Center at Pali Momi in Aiea, Wilcox Memorial Hospital in Lihue, and Straub's main hospital on King Street.

The four medical centers represent a total of about 750 licensed hospital beds, well beyond the 550 beds at the Queen's Medical Center, Hawaii's biggest hospital.

The individual hospitals would retain the same name, locations and boards of directors, except for Straub, which is a for-profit company and would have to convert to nonprofit, according to Straub spokewoman Ann Nishida.

Also, Straub doctors could no longer be shareholders in the company or control the board of directors, although some could be on the board, Nishida said.

The parent organization Hawaii Pacific Health would have a board composed of members from each hospital as well as the community, Nishida said.

The merger is the result of increasing pressures placed on hospitals nationwide, following the federal Balanced Budget Act of 1997, which has stripped millions of dollars in hospital revenues by slashing reimbursements for Medicare and Medicaid.

"It makes it extremely challenging," said Pat Oda, spokeswoman for Kapiolani Health. Budgets for all of Hawaii's hospitals have been waning, she said.

The merger could help the three partners streamline operations and organizations, as well as share budgeting for physical improvements, said Wilcox spokeswoman Lani Yukimura.

The merger process will take at least another six months, however, because of necessary regulatory measures required by the state, including final approval by Marilyn Matsunaga, administrator for the state Health Planning & Development Agency. The merger must meet several criteria and could face public hearings, Matsunaga said.

"There's so much to come and yet to do," said Oda.

The hospitals must discuss potential ways to swap services, such as pediatrics, which is a speciality of Kapiolani. "Some of our staff had concerns: Will ours (pediatrics) be phased out?" said Straub spokeswoman Nishida.

Nancy McGuckin, executive director of the union representing Hawaii's nurses, said the hospitals have told her that the merger should not affect existing union contracts. She doesn't expect layoffs either, though she notes the hospitals have been discussing how to streamline administrative personnel.

Hospital spokespeople acknowledge the possibility of streamlining, but say it's too early to comment on specific changes.

McGuckin said the Hawaii Nurses' Association's main concern is the impact of the merger on Wilcox, which has been a critical part of Kauai's community since it was founded by the Wilcox family in 1938.

Wilcox spokeswoman Yukimura said the merger should have no negative impact on the hospital's community-based culture.

Kapiolani Health was founded in 1890, while Straub originally formed in 1921. Both have about 2,000 employees, while Wilcox has 565.